Kibaran Resources building strategic graphite province in Tanzania
Kibaran Resources (ASX: KNL)
is building a strategic graphite province in Tanzania with independent
consultants identifying an Exploration Target of between 60Mt and 200Mt
of graphitic schist at its wholly-owned Merelani Prospect.
Notably, it is located just 15 kilometres from Richland’s Merelani graphite mine, which has the largest historical production of graphite in East Africa.
The company had recently extended its existing Memorandum of Understanding with Richland Group to finalise terms for a binding agreement to consolidate their Tanzanian graphite assets, building a world class graphite province.
A 2,000 metre reverse circulation drilling program has been designed to test the validity of the exploration target.
The timing of this program will likely be in conjunction with the drilling planned at the historical graphite mine once the agreement has been finalised.
Independent geological group CSA Global Pty Ltd, have estimated an Exploration Target of between 60Mt and 200Mt of graphitic schist grading between 9% and 12% total graphitic carbon within the Merelani Prospect.
The estimate is based on exploration and geological work which Kibaran completed at the Merelani Project.
Tonnage and grade ranges were determined from a 3D block model which incorporates grade based graphitic schist domains for the interpreted zones.
Merelani-Arusha Graphite Project consists of seven tenements and covers an area of 973.4 square kilometres about 15 kilometres east of the historic Merelani graphite mine.
Merelani Graphite Mine
The Merelani Graphite Mine commenced mining operations in 1995 and produced 6,776 tonnes of graphite.
Mineralisation was initially identified to be sufficient for a 40 year operation at a production rate of 15,000 tonnes per annum of high-grade, large flake graphite of 97-98% carbon.
The last shipment of remaining stockpiled concentrate in 1998, included a percentage of 99% carbon which was produced through natural attrition and not chemical treatment.
This is clearly a premium product given that the current graphite market and Kibaran’s binding offtake agreement for the Epanko Deposit at the Mahenge Graphite Project is seeking 94-97% carbon and a high distribution of large flake greater than 180 micron.
The Merelani graphite mine represents the largest historical production of graphite in East Africa and only a fraction of the occurrence was mined prior to mine closure.
Richland acquired the Merelani Tanzanite and Graphite Mine in 2004 from African Gem Resources, which had modified the graphite mining operation and plant to focus on tanzanite gem extraction only.
Significant infrastructure and equipment originally installed for the extraction and processing of graphite still exist and are currently partly in use for Richland’s tanzanite mining operation.
Under the MoU, Kibaran and Richland are working towards legally binding agreements to consolidate their respective graphite assets in the Merelani region in a joint venture.
Today’s estimation of an Exploration Target of 60Mt to 200Mt of graphitic schist grading between 9% and 12%TGC for Kibaran Resources’ Merelani prospect is a key step towards its building the Merelani region into a graphite province.
Instrumental to this strategy is the company’s agreement with Richland to consolidate their respective graphite assets in a joint venture.
That this includes the Merelani graphite mine that was historically the largest graphite producer in East Africa is a definite plus.
Adding further to this is the high-grade, large flake graphite that the mine produced, which at 97% to 98% carbon represents a premium product compared to the 94% to 97% carbon sought in the current market.
Proactive Investors believes that Kibaran's current valuation of circa $11 million is primed for appreciation given news flow and catalysts ahead.
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